Construction Pacific Management v Bianco (No.2)
[2005] FMCA 460
•29 March 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CONSTRUCTION PACIFIC MANAGEMENT v BIANCO (No.2) | [2005] FMCA 460 |
| BANKRUPTCY – Bankruptcy notice – whether the inclusion of 4 documents attached to the notice some of which refer to the applicant by a different name could confuse a debtor – whether differences of amount claimed and inclusion of unclaimable amount could confuse debtor – whether failure to serve notice under s.41(5) Bankruptcy Act – prevent claim that notice is likely to mislead debtor as to what is required for compliance. |
| Bankruptcy Act 1966, ss.41(5), 52, 306 Legal Profession Act 1987 (NSW) s.208J |
| Stephen William Clancy v Dale Robinson [2002] FMCA 47 Touma v Gold Holdings [2002] FMCA 233 Trevor Peter McSwiney; Ex parte Mark Sydney Davies (Federal Court unreported 24/11/1986) Kleinwort Benson Australia Ltd v Crowl 79 ALR 161 |
| Applicant: | CONSTRUCTION PACIFIC MANAGEMENT PTY LIMITED |
| Respondent: | SERAFINO (PHIL) BIANCO |
| File Number: | SYG3338 of 2004 |
| Judgment of: | Raphael FM |
| Hearing date: | 29 March 2005 |
| Date of Last Submission: | 29 March 2005 |
| Delivered at: | Sydney |
| Delivered on: | 29 March 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr A Bouris |
| Solicitors for the Applicant: | Baron & Associates |
| Solicitors for the Respondent: | Proctor Phair Lawyers |
ORDERS
Petition dismissed.
Applicant creditor pay the costs of the respondent debtor to be taxed, if not agreed, in accordance with the Federal Court Act and Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG3338 of 2004
| CONSTRUCTION PACIFIC MANAGEMENT PTY LIMITED |
Applicant
And
| SERAFINO (PHIL) BIANCO |
Respondent
REASONS FOR JUDGMENT
These proceedings are an application for a sequestration order against a debtor whose name is Serafino (Phil) Bianco. Mr Bianco the debtor, seeks the dismissal of the petition on the basis that the act of bankruptcy upon which it is founded required the compliance with an invalid bankruptcy notice. The debtor also argues that he is solvent and that I should exercise my discretion not to sequestrate his estate.
I was advised at the commencement of the proceedings that the applicant was not in a position to prove the formal matters under s.52 of the Bankruptcy Act 1966 and so I have dealt first with the arguments concerning the bankruptcy notice.
The bankruptcy notice is numbered NN1203/04. It is addressed to Serafino (Phil) Bianco described as the debtor. It states in paragraph (1) that the debtor owes the creditor a debt of $42,517.32 "as shown in the schedule". The schedule sets out the amount of the judgment or order which supports the notice. In column 2 of the first part of the schedule it states that the amount of judgments or orders is $42,517.32 and that is the figure for the total debt owing.
Paragraph (2) of the bankruptcy notice states:
“The creditor claims that the debt is due and payable by you. A copy of the judgments or orders relied upon by the creditor is attached. At the time of applying for this Notice, execution of the judgments or orders had not been stayed.”
There is attached to the Bankruptcy Notice the following documents:
a)An order of Bryson J in the Supreme Court of New South Wales that costs of the defendant in certain proceedings numbered 3793 of 2001 be payable by Serafino Bianco known as Phil Bianco to the defendant.
b)A Civil Claims coversheet from the Local Court at Downing Street in file number 4150/04. This indicates the judgment creditor is Construction Pacific Management. The judgment debtor is a person by the name of "Seafinao" (Phil) Bianco. The document also states that the balance of the debt is $42,517.32. The document has a stamp on it stating that it was filed at the Civil Claims Registry in Sydney on 21 April 2004.
c)The next document is a form 4 certificate as to determination of costs of cost assessor which states that a sum of $885.50 is to be paid by "Seafinao" (Phil) Bianco to the proper officer of the Supreme Court.
d)Another certificate as to determination of costs which is a determination that the costs of the applicant Construction Pacific Management Pty Limited to be paid by the respondent "Seafinao" (Phil) Bianco is $42,456.32 but also noting that credit has to be given by the costs applicant to the costs respondent for the sum of $1000 paid on account.
e)This final document is a customer record from the Westpac Banking Corporation indicating that a cheque for $1000 was paid by Mr Bianco to Baron & Associates who are the solicitors for the creditor.
Mr Bianco argues that there are a number of problems with the Bankruptcy Notice. He states first that his name is not "Seafinao" (Phil) Bianco but Serafino (Phil) Bianco. He argues that the document entitled “Civil Claims coversheet” is not a copy of a judgment relied upon but something less than such a document. He argues that the inclusion within the bankruptcy notice of the costs of the cost assessor in the sum of $885.50 which is not payable to the creditor but to the Supreme Court of New South Wales is a matter which would confuse the reasonable debtor in the circumstances. And he argues that the determination of the costs assessor in the sum of $42,456.32 less $1000 is a figure of $41,456.32 which is not reflected in the claim's cover sheet which indicates that a total amount of $42,517.32 is owed. He states that that figure also has the effect of confusing a debtor.
I considered what represented a copy of a judgment or order in two cases, Stephen William Clancy v Dale Robinson [2002] FMCA 47 and Touma v Gold Holdings [2002] FMCA 233. In the latter I came to the view that a letter issued by the Civil Claims Registry did not constitute a copy of the judgment. In the former there was no need to give the word "copy" a narrow interpretation and that a sealed certificate of judgment signed by the Registrar of the District Court which clearly set out the amount owing by the debtor to the creditor which was not confusing on its face constituted a copy of the judgment for the purposes of form 1. The document which I have before me today is not such a document. It is exactly what it says, a civil claims cover sheet. It is certainly signed by the facsimile signature of the Registrar but it is not sealed and to my mind does not constitute a copy of the judgment.
Mr Bouris argues that there is no need for a copy of the judgment in this particular case. He notes that s.208J of the Legal Profession Act 1987 (NSW) is in the following form:
“In the case of an amount of costs that has not been paid, the certificate is, on the filing of the certificate in the office or registry of a court having jurisdiction to order the payment of that amount of money, and with no further action, taken to be a judgment of that court for the amount of unpaid costs, and the rate of any interest payable in respect of that amount of costs is the rate of interest in the court in which the certificate is filed.”
I think there is much to be said for Mr Bouris' argument. And it may very well be that in these particular cases all that has to be done is to establish that the cost assessor's certificate has been filed and that will be sufficient. I do not intend to make any finding on this point because I feel that the documents attached to the bankruptcy notice and said to constitute the judgment are confusing or would be confusing to a reasonable debtor. I take this view because of a combination of matters. I believe that it is not appropriate in this particular case when considering the arguments of the debtor to fillet each argument so that they are all minimised and no consideration is taken about the cumulative effect. Thus whilst I would accept that Trevor Peter McSwiney; Ex parte Mark Sydney Davies (Federal Court unreported 24/11/1986): Beaumont J, may be authority for the fact that the giving of a wrong forename to a debtor is a matter which can be cured by s.306 of the Bankruptcy Act the giving of the wrong name to this particular debtor must be taken in the context of the whole of the document. The debtor is asked to turn to some four documents to find the judgment. The name on the first document is not the same as the name on any others except on his own Westpac Banking Corporation Customer Record. There is included amongst the documents an otiose demand for $885.50. Finally, the assessment of party and party costs is in the sum of $42,456.32 but the applicant has not been given credit for $1000 as required in the claim cover sheet.
Mr Bouris argues that the error in the calculation of the amount owed by the sum of $1000 is no more than an overstatement of the judgment debt which the debtor cannot complain about because he has failed to file the notice required under s.41(5) of the Bankruptcy Act. I do not think it is as simple as that. I think that the confusion which is likely to arise from the juxtaposition and inclusion of all these documents is something separate from a mere overstatement. I am satisfied that these documents are objectively capable of misleading a debtor as to what is necessary for compliance with the notice Kleinwort Benson Australia Ltd v Crowl 79 ALR 161. I am not satisfied that the defects which I have found are purely formal and capable of being rectified by the provisions of s.306, even if taken individually, I might have been prepared to adopt that stand with regard to the incorrect name.
It follows from the above that I do not believe that the bankruptcy notice issued against this debtor was a valid notice and that his non-compliance with it could constitute an act of bankruptcy. I dismiss the petition and I order that the applicant creditor pay the costs of the respondent debtor to be taxed, if not agreed, in accordance with the Federal Court Act and Rules.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date:
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